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Valued Social Butterfly
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Re: Why are Global Markets in a serious Tailspin?

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@CriticalThinking

Just watched trump blame the Fed for his actions. Once again he will not take responsibility for overcooking the economy. I lay no claims to being an economist, but somehow I don’t think that trump understands the dynamics, and inter relationship of his policies and actions for our national economy and the world economy. 

The larger problem is that I don’t think he cares...he’s like a junkie and just wants another and another and another sugar high to stroke his ego...even if it affects people in a negative way. 

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Valued Social Butterfly
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Re: Why are Global Markets in a serious Tailspin?

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The Fed (which is independent) kept rates the same during Obama's 8 years and with the hot economy during Trump's two years (income tax cuts, corp tax cuts, people getting raises, low unemployment), the Fed has been raising the borrowing rate so people that get NEW mortgages will see higher rates and people owning homes/cars with fixed interest rates will see no impact but may latch onto higher CD rates at their bank!

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Trusted Social Butterfly
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Why are Global Markets in a serious Tailspin?

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Message 3 of 8

Not Happening's numbers are correct, but he's missing the point. Yes the stock market's been outstanding since Trump became President, but he's laying the foundation for a huge market fall. What is that foundation?

  • Large Deficits
  • Higher Interest Rates
  • Tariffs and International Trade Wars

Over the long term, all of the above is going to catch up with us and cause major damage. Right now, mortgage rates are more than 1% higher than they were a year ago. What does that mean? It translates into a depressed housing market if this continues.

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Valued Social Butterfly
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Re: Why are Global Markets in a serious Tailspin?

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Message 4 of 8

Keep in mind, the Fed just increased the borrowing rate and the market was due for a correction.

In October 16, 2016 the DJIA was 18,142 and today is 25,665 - an INCREASE of 41% despite the drastic fall!

Despite that big drop, the S&P 500 was 2143 on 10/1/16 and today is 2778 (right now) an INCREASE of 30% in two years.

 

 

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Trusted Social Butterfly
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Why are Global Markets in a serious Tailspin?

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Message 5 of 8

Yes Tom, a huge deficit and a monster budget, are causing debt concerns and rising interest rates. Remember when Republicans stood for reducing the deficit? Oh, that was before the Trump Cult took over.

 

Throw in an international trade war, and we have the perfect recipe for a global recession.

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Treasured Social Butterfly
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Re: Why are Global Markets in a serious Tailspin?

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Message 6 of 8

"I told you so". You will hear that a lot from liberals (and economists) over the next year.  

 

We all knew it would take time for Trump's disastrous decisions to offset the economic engine created by Obama.  Even Trump could not destroy that progress in just a few months but his continued program of really bad decisions seems to be hitting the only metric of which he could brag; the stock market. 

 

Each tariff and suspended trade agreement was another blow to the confidence of the world markets in future profits.  While Trump has little control over interest rate changes, those changes acted as the "last straw", investors fled from stocks and the market is crashing. I really hope this is just a correction but if Trump continues to erode the confidence in a free market, it will get much worse. 

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Valued Social Butterfly
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Re: Why are Global Markets in a serious Tailspin?

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Message 7 of 8
yep. Gov't is borrowing heavily as our debt approaches $1 trillion.
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Trusted Social Butterfly
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Why are Global Markets in a serious Tailspin?

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Message 8 of 8

The 3 largest single day drops of the DOW in stock market history, all happened during the Trump Administration. Investors are terrified of an unstable, economically ignorant, and irrational president of the United States.

 

Interest Rates

 

A monster federal budget plus huge GOP tax law deficits run up by the Trump Administration are causing interest rates to rise significantly. More debt and higher federal deficits always result in higher mortgage rates, auto loans, student loans, and credit card debt. This will eventually take its toll on the economy.

 

In addition high interest rates take money out of the stock market into the bond market.

 

International; Trade Wars

Trump's international tariffs and trade wars are scaring investors around the globe

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